Central nervous system (CNS) in leech comprises segmentally iterated progeny derived from five embryonic lineages (M, N, O, P and Q). Segmentation of the leech CNS is characterized by the formation of a series of transverse fissures that subdivide initially continuous columns of segmental founder cells in the N lineage into distinct ganglionic primordia. We have examined the relationship between the N lineage cells that separate to form the fissures and lateral ectodermal and mesodermal derivatives by differentially labeling cells with intracellular lineage tracers and antibodies. Although subsets of both lateral ectoderm and muscle fibers contact N lineage cells at or near the time of fissure formation, ablation experiments suggest that these contacts are not required for initiating fissure formation. It appears, therefore, that this aspect of segmentation occurs autonomously within the N lineage. To support this idea, we present evidence that fundamental differences exist between alternating ganglionic precursor cells (nf and ns primary blast cells) within the N lineage. Specifically, ablation of an nf primary blast cell sometimes resulted in the fusion of ipsilateral hemi-ganglia, while ablation of an ns primary blast cell often caused a 'slippage' of blast cells posterior to the lesion. Also, differences in cell behavior were observed in biochemically arrested nf and ns primary blast cells. Collectively, these results lead to a model of segmentation in the leech CNS that is based upon differences in cell adhesion and/or cell motility between the alternating nf and ns primary blast cells. We note that the segmentation processes described here occur well prior to the expression of the leech engrailed-class gene in the N lineage.